Tuesday, January 23, 2007

Why are cities so expensive?

It all comes back to this guy, and people like him. Ed Glaeser' s work suggests the same radical idea, that housing prices have gone up primarily because of regulation. It restricts the supply! Supply goes down, the price goes up! Why does it take research to make this point?

Addendum: By extension, it should also be clear that excessive regulation in cities is also the root cause of sprawl. As this article states:

No other region in the country, however, has created as many jobs in recent years as the Washington metropolitan area. Between 2000 and 2005, the region added 359,000 new jobs, said Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University, citing Labor Department statistics. That was 75,000 more jobs than the nation's No. 2 job engine, Miami. "We've been adding jobs faster than we've been able to add resident workers," he said. "Had we been able to produce more housing, we could have added more people."

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